A cyberattack on the Colonial Pipeline is causing a major challenge for fuel delivery for a pipeline that carries fuel from the Gulf Coast to the Northeast.
The Colonial Pipeline transports gasoline and other fuel through 10 states between Texas and New Jersey. It delivers roughly 45% of fuel consumed on the East Coast, according to the company.
The attack happened Friday. Investigations believe the attack had been carried out by a criminal gang known as DarkSide, which cultivates a Robin Hood image of stealing from corporations and giving a cut to charity.
“This is taking away from Americans who rely on Americans who need to get to and from work. It is essentially robbing everyone from performing daily tasks which are imperative to basic living,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “This is a critical piece of national infrastructure. I highly expect the U.S. to go after this hacker group with a vengeance and they should. This is nothing to mess around with.”
President Biden issued an emergency declaration. The emergency powers lifted restrictions on fuel transport by road to keep fuel lines open and prevent shortages. It covers Alabama, Arkansas, District of Columbia, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia.
“But I don’t see much of a pricing impact to Indiana nor outages. There will be no shortage of gasoline for markets in the Midwest, but you may see some interesting dynamics that emerge. Not all of them may be fully known simply because the gravity of the situation is something we’ve never seen before,” said DeHaan. “There’s really no need for motorists in Indianapolis or Indiana to worry at all.”
The longer this goes on, the higher oil prices could go. That could affect the entire country.
“It really depends. If it goes beyond a week and refineries in the Gulf Coast have to shut down, then yes, it could have more of an impact on prices nationally,” said DeHaan.
DeHaan says he is hopeful the situation will quickly improve as multiple levels of government are involved, but he says this may become a nightmare should it continue just ahead of the start of the summer driving season.